In-Shell Shipments

The May 2024 walnut in-shell shipments totaled 11.392 million lbs., a 3.9% decrease compared to 11.851 million lbs. in May 2023. Despite this decline, in-shell shipments for the 2023/24 crop season are up 26.8% year-over-year.

Kernel Shipments

Walnut kernel shipments in May 2024 reached 47.534 million lbs., an 11.6% drop from 53.751 million lbs. in May 2023. However, kernel shipments for the 2023/24 season are up 14% compared to the previous season.

Crop Overview

The final crop receipts for the 2023 season amounted to 820,966 tons, surpassing the National Agricultural Statistics Service (NASS) estimate of 760,000 tons by 7.5%.

Market Summary

supported by Summit, argue that the drop in shipments is due to a lack of inventory. California has nearly exhausted its walnut supply, leaving only limited and high-priced kernel offers.

The increased demand since February can be attributed to Chile's early crop sales. As Chile realized their crop was short and raised prices, buyers turned to California, leading to the current situation.

New Crop Sales

New crop sales for California walnuts have begun, with several large in-shell contracts completed at much higher levels than seen in the past three seasons. The prices, starting at $1.05-$1.10 CIF basis, are still considered bargains. The previous prices were unsustainable for growers, leading to orchard reductions and expected smaller crop sizes between 675,000 and 750,000 tons for the upcoming season, compared to 820,000 tons in 2023.

Market Dynamics

Chile's short crop means they will likely be sold out before California begins its harvest. Although China has a large crop, California can command higher prices due to reduced crop sizes and market share. The pipelines are expected to be empty by year-end, sustaining demand for California walnuts despite the competition from Chinese walnuts.

The walnut market is experiencing a shift due to inventory shortages and changing supply dynamics. While shipment declines in May reflect these challenges, the overall season has shown significant growth. With new crop sales starting at higher prices, stakeholders should anticipate continued market adjustments. Monitoring the supply from major producers like Chile and China will be crucial in navigating the market landscape effectively.

Source:SummitTreeNuts